Photo Credit: Melanie Lim via Unsplash
While it’s been said countless times, 2020 was not the year anyone expected it would be. As much of the world focused on the ongoing COVID-19 pandemic, many other national issues – like the issue of food affordability and accessibility – fell out of view from the public eye.
Released each December as a collaborative effort between Dalhousie University, University of Guelph, the University of British Columbia and the University of Saskatchewan, Canada’s Food Price Report analyzes trends of the previous year and predicts how food prices will change in the coming year. Being further compounded by the economic impact of the pandemic, food prices in 2021 are expected to become even higher.
As per the most recent edition of the report, grocery prices are forecasted to increase on average between three to five per cent in 2021. Individually, bakery products have the potential to increase by up to five and a half per cent, dairy up to three per cent, seafood up to three and a half per cent and fruits up to four per cent. The highest increases are expected to be seen in meat and vegetable prices, which could rise by four and a half per cent and six and a half per cent respectively.
The annual food expenditure for the average Canadian family of four is predicted to be about $13,907 in 2021, which is an increase of $695 from 2020. The average Canadian adult can expect to pay about $160 more annually for groceries. It’s worth noting these increases only reflect money spent on groceries and not food services, such as restaurants.
The report breaks down potential variables that affect food pricing into three categories: macro, sectoral and domestic. It’s important to note that some of these variables will cause food prices to increase, others will cause decreases and the effects of many are not yet known.
According to the report, due to the pandemic affecting the economy, the loss of jobs and the reliance of many Canadians on government aid, the extra $695 a year is a stark increase for most families.
This additional cost that Canadians will potentially payout is based on existing eating habits, but simple changes like cooking more at home, consuming less processed food and forgoing food delivery can help save money which will alleviate some of these costs. Between busy schedules or lacking a vehicle, among other factors, not every household will be able to make the changes needed to offset this increase.
“I think just a small change everyday can actually go a long way towards trying to reduce that cost. With planning and careful thought, most people can actually change their eating habits,” said James Vercammen, Project Lead in the Canada Food Price Report research. “Canadians can start going shopping with a grocery list. Swap out meat for cheaper protein alternatives like legumes. Buy produce that’s in season and consider buying frozen produce. Purchase items that are on sale and tailor meals towards those products and buy in bulk.”
Over 50,000 people in Niagara struggle to afford food. The struggle to make ends meet is a source of tremendous stress and anxiety, often making it difficult to focus on anything else. When people are forced to choose between healthy food and paying rent, shelter becomes the priority. With the rising costs of living and fluctuating unemployment rates, more people are pushed to make difficult choices.
Food prices typically rise two to four per cent in a year, but this year they have the potential to rise a full percentage point higher than that average. A big part of that is caused by inflation.
“The main thing to recognize is that, first of all, all prices go up in most countries — that’s just the general rate of inflation,” said Vercammen. “What we need to worry about is the extent that food prices are rising faster than the general prices.”
The report predicts the ongoing COVID-19 pandemic will undoubtedly affect the food chain and pricing in 2021, but without additional data, the extent isn’t clear.
Last year saw record and worsening heat, ice loss, wildfires, floods and droughts. As a result, the report cites climate change as a very likely variable that will cause a significant impact on food prices.
Currencies and trade will also have an impact, as a weak Canadian dollar affects importers’ buying power, which means imported items will likely cost more.
The early stages of the pandemic saw panic buying and hoarding behaviour. Although short-lived, Canadians emptied shelves of non-perishable foods and even toilet paper.
“COVID-19 has resulted in increased income insecurity as many Canadians found themselves either unemployed or underemployed. Income insecurity is a key factor in food insecurity,” said Vercammen.
According to the latest Statistics Canada data, the economy lost 63,000 jobs in December in the first monthly decline since April amid tightened public health restrictions to slow a resurgence in the pandemic. In Niagara, the unemployment rate now sits at about 9.1 per cent compared with 8.5 per cent in November. Approximately 10 per cent of Niagara households are food insecure. 25 per cent of these households have no place to go for food.
Consumers alone didn’t feel the economic fallout from the pandemic, food producers and distributors did as well. Meat processing plants across the country operated below normal capacity and efficiency. Food processing work requires manual labour and working in close quarters, so the virus spread rapidly in these work environments. In worst cases, several plants shut down, resulting in a backlog of animals on farms. COVID-19 outbreaks plagued a number of agricultural farms across the country which, coupled with issues in the food chain as a result of foreign workers’ inability to enter Canada due to travel restrictions, took a major toll on the industry.
Much like 2020, adaptability for consumers, producers and distributors will be paramount in 2021.
In the pandemic’s early days, Canadian food habits changed almost immediately. Once thriving restaurants suddenly had massive surpluses of food but fewer customers to sell it to, so much of it was donated to food banks. These restaurants often had to adjust capacity, offer solely takeout and pickup options or shut down entirely.
“Takeout is helpful for restaurants, but it’s certainly not going to pay all the bills,” said Vercammen. “For every restaurant that closes, we know there’s a story there.”
Consumers’ grocery store experiences have also changed, going digital. Many people have opted for curbside pickup or delivery options over traditional grocery shopping. According to Vercammen, this change is likely to be the standard for a long time as consumers embrace the ease of digital shopping options.
As much of the population is working from home, more people are eating at home. Data in the Canada Food Price report showed 60 per cent of respondents reported making more meals from scratch, 70 per cent spent more time cooking and 50 per cent involved their children more in meal preparation.
It is these families, as well as those with low household income, that a $695 increase in food costs will impact the most. This is due to a greater percentage of their income being spent on food. The increase will lead to people shifting their diets and normal purchasing habits in favour of cheaper alternatives.
“There’s always shifting in consumption of goods. If apples are more expensive, you’ll buy something else, right? That’s how households adapt to changing price dynamics,” said Vercammen.
According to the report, climate change remains one of the largest threats to the global food chain. Produce is often at the mercy of unpredictable weather, which leaves Canada in a vulnerable position due to its often unpredictable climate. This is further exacerbated by the fact that Canada imports a large amount of fruits and vegetables from around the world.
Consequently, many consumers have shopped locally during the pandemic to support small businesses and because locally sourced food isn’t as susceptible to supply chain issues or climate change crises abroad.
With the help of funding from the provincial-federal Agri-Food initiative, many farmers in the Niagara Region have been able to maintain their food supply and sustain business. This funding, alongside government pushes for Canadians to eat healthier and buy locally, have created a surge in demand for local produce. While it is unknown if it will last, the increased demand has certainly sparked renewed interest in local food supply chains, food autonomy and whether there are possibilities for viable local alternatives in food supply chains.
Local restaurants and farmers markets do however continue to face restrictions surrounding operations as the province remains under stay-at-home emergency orders.
Under the current provincial stay-at-home order, there is currently no indoor or outdoor dining, however restaurants are allowed to open for drive-through, delivery and takeout service. Though most other facilities can only be open between 7 a.m. and 8 p.m. under the order, restaurants and other food service organizations are not confined by those limitations. The St. Catharines Farmers Market will continue to run but only on Saturdays with limited capacity of one person per vendor.
As Ontario remains in lockdown, the demand for food services is expected to decrease in 2021 and onward the year progresses. In order to stay afloat, the partnering between restaurants and food delivery services and meal kit services is expected to grow, which could cause a price increase for consumers.
Amidst the concerns of rising food prices, one local agency, United Way Niagara, has committed to making Niagara a food secure community – which includes making food as affordable as possible. United Way Niagara offers support programs and services that assist people in accessing and obtaining the food they need to live and ultimately thrive. The organization often invests in programs such as community kitchens, school meal programs, food distribution initiatives and community gardens.
United Way Niagara is just one of the many local organizations that are working to help alleviate the pressures of food affordability in the region. Many have devoted countless hours and manpower to aid residents who require continued support during this time.
Residents are encouraged to plan for potential food price increases in the coming year and seek help from municipal food agencies when in need. Food price factors to watch for in 2021 include the continued impact of COVID-19, effects of climate change, growth in e-commerce and online services, continued loss of the food manufacturing sector, the national ban on some single-use plastics and the impact of U.S. politics on food policy and the Canadian dollar.
Vercammen believes the trend of food price increases will continue, but cautions that because prices increase naturally every year and are driven by a multitude of factors, there is no guarantee that the anticipated increase will happen. He is, however, hopeful that in lieu of this, more funding will be made available to help residents and local producers cope.
With sustained uncertainty about the COVID-19 pandemic, we can expect that the virus will continue to impact the food industry and food prices in 2021. However, the agri-food supply chain has learned valuable lessons from COVID-19 and is likely to be more adaptable to challenges posed by subsequent waves.
“We have to give thanks to the people who worked throughout the whole supply chain, right from the growers, to the processors, to the food manufacturers, trucking industry and retailers,” said Vercammen. “Throughout the COVID-19 pandemic, they’ve done [well] at keeping store shelves stocked and prices reasonable. It is my hope that we learned a lot from these [individuals] so we can make more informed decisions in the year to come.”
While the report is published by accredited national universities, it is important to note that the data represented in it is not infallible. Interested readers are encouraged to monitor their local situations and reach out to the relevant local agencies for specific information. A complete list of local food resources for Niagara Region residents can be found by clicking here. To find out more about United Way and the services they offer, visit www.unitedway.org.